A Homeowner’s Guide to Dealing with an Inevitable Major Home Repair
There are two types of homeowners: either you’ve already had to deal with major home repairs or you will in the future. Things go wrong with houses — it’s just inevitable. Part of being a smart homeowner is being prepared for whatever and knowing what to do when whatever happens. Here’s a guide to help get you ready.
Always Keep Your Homeowners Insurance Active
As adult members of society, we have a lot of insurance premiums to worry about on a monthly basis. We have to deal with health insurance, car insurance, life insurance, and more. Sometimes, it’s easy to forget about the importance of home insurance. Good home insurance plans will cover damage to the interior and exterior of your home and loss of property in and around the home. As Investopedia notes, home insurance is a necessity — not a luxury.
Keep a Rainy-Day Home Repair Fund
While homeowner’s insurance is crucial, it won’t cover everything (think flood damage, sewage problems, and mold issues, for example). It also won’t cover the cost of normal wear and tear, such as when you need a new roof or HVAC unit. That’s why you must keep a robust savings fund for home repairs. It’s smart to divert the equivalent of 10 percent of your monthly mortgage payment into a high-yield savings account. You should shoot to have at least $3,000 to $5,000 in your repair fund at all times (more is better).
Know Your Way Around Your Home
Here’s a simple truth: The more you know about your home and everything in it, the better off you’ll be when something acts up. Of course, the handier you are, the more you’ll save on home repairs (your own labor is free). However, even if you don’t know how to fix your air conditioner, for example, it helps to at least know enough about it so as to avoid being ripped off by a repairman. It’s smart to check out guides to learn up on your home’s major systems. The more you know, the more you can save in the long term.
Be Smart About Hiring Help
For most major home repairs, you’re going to have to call in some help. It’s vital that the help you call does quality work at a reasonable price. Taking the time to find a good contractor, electrician, plumber, or repairman is worth every second. Some tips for this include getting multiple estimates and pick the best one (not always the cheapest), scouring online reviews, getting recommendations from friends and neighbors you trust, and holding interviews with potential contractors (remember, this is a job interview!).
Borrow Money in a Healthier Way
If the rainy-day repair fund just won’t cover the full cost of your home project, you may have to borrow some extra cash. Unhealthy ways to do this include putting the whole thing on your credit card or dipping into already-spoken-for funds (and putting off those payments to the future). Better options include applying for a loan with a bank or reputable loaner (generally lower interest rates than a credit card) or taking out a home equity line of credit. Also, don’t forget that if you are a senior, veteran, or suffered home damage in a natural disaster, then the government may be willing to help you cover those costs.
With apologies to the author of this famous quote, there aren’t two certainties in life, there are three — death, taxes, and something going wrong in your home. Be a smart homeowner and be prepared for the inevitable. If you are, a major home repair won’t blindside you.